Budgeting for Buying a Boat

Budgeting for Buying a Boat

by Barbara Burke

When chatting with a prospective purchaser for the first time, I often tell them that buying a boat is kind of like buying a puppy; it’s not just the price of the puppy that needs to be considered, it’s the cost of raising the dog. It’s the food, vet bills, leashes, obedience training… not to mention the cost of replacing things they chew up as they’re growing into well-behaved and loved family members.

Similarly, in addition to the purchase price, there are certain expenses you need to be prepared for, when buying a boat. Some of these costs are associated with the actual purchase while others are for discretionary creature comforts. But all are fairly immediate in nature and should figure into your budget.

Depending on which state you plan to use the boat in, probably the biggest consideration is Sales/use tax. In Florida, that runs 6% of the purchase price plus a $50-100 County Discretionary tax.

When you sign a purchase and sale agreement on a boat, it’s typically contingent on your being satisfied with a survey. This is the marine equivalent of a home inspection in real estate, where a knowledgeable and accredited professional examines the structural and mechanical components of the boat to make sure its condition is commensurate with its age and the price you’re paying for it. Marine Surveyors usually base their fees on the length of the boat and run approximately $22-25/foot, including a sea trial. Often it’s advisable to hire a separate engine surveyor, which will run about $900-1,000, including oil samples being sent to a lab for analysis.

Haul out for hull inspection ranges from about $6/foot to $9/foot plus about $2/foot for pressure washing the bottom, if the growth is obstructing the view of the hull.

Assuming the boat meets the buyers’ expectations, a title search is done with the US Coast Guard to make sure there are no outstanding liens, and Bills of Sale and other closing paperwork are prepared through an outside Documentation Service or “Doc Agent.” Title search, un-documenting or “deleting” from Coast Guard and re-documenting in your name runs about $700-750. State of Florida title/registration is about $275 each, for boat and dinghy, if there is one, including Doc Agent fees for handling it and State fees.

The price of insurance is based on the age/size/value/make of the boat, where you plan to use or keep it, and your personal boating experience. So it’s best to leave that figure, even a ballpark estimate, to an insurance professional. To get the most favorable rates, put together a boating resume and give it to your insurance broker well ahead of time. The longer he or she has to shop rates for you, the better your price will be.

Once the boat is yours, you’ll need a place to put it. If the boat is in a city other than where you will keep it, you need to factor in delivery costs, including fuel, dockage along the way, provisions for crew, and possibly a Delivery Captain. And because you may be using a boat that has been sitting for a while, there’s the potential for repairs.

Marinas’ rates vary widely depending on location, condition, and amenities offered. Around Jacksonville, you can expect to pay between $10-18/foot, but be aware that some marinas base their charges on the stated length of the boat, some on the overall length from tip of the anchor on the bow through the dinghy on the stern, and others charge by the length of the slip you need. So for instance if your length overall is 48’ but they have to put you in a 50’ slip, you pay for 50’. Electricity is usually an extra charge (excuse the pun). Security deposit for dockage is usually equivalent to a month’s slip rental.

It’s important to keep the bottom and running gear clean, and a professional diver will do that for somewhere around $2/foot. While he’s under water, he’ll check your zincs and replace them as needed, for an additional fee.

There are things you’ll want to add to the boat to make it your own. From linens to electronics, just expect to want to go shopping! One of the things I highly recommend budgeting for if you’re planning to spend long periods of time on board, is a good mattress. A sore back can quickly ruin a boating adventure!

Obviously, each boat is different and expenses will vary. The list above isn’t intended to be comprehensive, but rather to provoke thought. But if you properly plan and budget, your boat, like a new puppy, can become a loyal friend that offers years of pleasure. Hope to see you on the water!

By Barbara Burke, a long time Broker Manager with Curtis Stokes & Assoc. based in Jacksonville, Florida. Contact Barbara for more information.

Disclaimer: Curtis Stokes and Associates does not necessarily agree or promote the content by the above author. This content is to be used only with the reader’s discretion.